Term deposits are a specific savings product that have a fixed term and a maturity. Funds cannot be withdrawn until the end of this term which results in a higher interest rate. They are also referred to as time deposits or certificates of deposit.
For example you could have a term deposit account where a minimum balance of $500 must be kept in account for a term of 6 months at which time it will pay 2% interest.
Term Deposit functionality could manually be configured in Mifos by defining a new savings product and using start and end date to create a term. This would correspond to the time period for interest calculation and frequency of interest posting to the account. One would also set the minimum balance required for interest calculation.
True term deposit support would allow for defining the term, maturity date, and specified actions that must take place at maturity directly from the Mifos UI with the corresponding business logic.
Objective of Fixed Deposit
Co-operative mobilezes money from external sources, banks & Funding agencies to fulfill the loan requirement of its members.
However, Members with excess money can also avail this product. Member gets assured interest based on the type of deposit.
Deposits tenure starts with minimum 1 month and can be extended to years.
Interst Component: Existing Savings interest component can be used by default.
Fixed Deposit types Duration Amount Range Interest Percentage
Before On maturity
Short Term FD Min: 1 Month
Max: Upto 1 Year Min: 1000
Max: NA 3% 5%
Medium Term FD Min: 1 Years
Max: 3 Years Min: 1000
Max: NA 3% 5%
Long Term FD Min: 3 Years
Max: NA Min: 1000
Max: NA 3% 5%
Interest Calculation process: There are 2 different types of interest on the FD.
• Interest % for the FD which are withdrawn before the maturity date
• Interest % for the FD for the members who withdraws after the maturity date. However, original FD interest should be calculated for the FD period and interest % should be revised to lower % for any period after the maturity date.
Donwgrading the Interest component for Matured Deposits
Once the FD gets matured the members can withdraw the FD amount or can re-deposit with an higher tenure period. However, if members does not opts for both of the options then the interest component should be reduced to lower interest Rates which will be applicable immediately after the maturity date.
Job for Interest Revisions
There should be a separate job which identifies the list of Matured FD and updates the interest % to lower interest rates.
Fixed Deposit Certificate
Co-operatives provides the FD certificate for the FD opting members. Certificate has the following information
Customer ID & Name with Photo
Type of Deposit:
Wanted to check if you have requirement of paying out only the interest component every quarter or every ( any time period) ? This is common in banks in India where for long term deposits, they payout the interest at regular intervals. I think from a MFI requirement perspective, it makes more sense to have only the full maturity payout as an option given the background to getting those deposits in the first place. Any thoughts ?
Updated the functional specification URL. Kindly review the same and let me know your thoughts/comments
Our customer pay-out interest with original interest rate upon maturity.
If FD is Withdrawn Before & after maturity customer is not entitled to get interest based on the original interest. However they pay interest with lower interest rates.
the current functional specification handles that scenario effectively from the Term Deposit product definition level. Kindly review and let me know if you think anything different needs to be done.